Thread: "Pre-Listing Inspections ???"

Anyone doing pre-listing (seller) inspections?
I have had a few recently.

Do you offer a re-duced fee wal-thru (review) to a prospective buyer?

In this "buyers market" it seems it would benefit by improving the transaction time... fewer inspection surprises or slow downs for seller... at least that is the idea.

Any marketing suggetions would be appreciated.

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Our FAQ says:


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I’m considering having you perform a “Sellers Pre-Listing” inspection. How is this different from a “Buyer’s Inspection”?

We perform our pre-listing inspections and prepare the reports identically to the same inspection performed for a buyer - our objective is to allow sellers to see their property “through the eyes” of a prospective buyer and the buyer’s inspector.

When performing a “Sellers Inspection”, at the client’s request we will review the report with the Seller and their listing agent at no additional charge.

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What I do wish, is that I could see the report of the buyer's inspector when they followed along behind me for QC proposes - I always ask the seller and listing broker (if I get to meet them), but it hasn't happened yet.

I don' t do anything special to market PLIs, and to date when they have come my way it has been by referral by a Realtor, or an attorney who has seen my reports.

BTW, had a seller's inspection this summer 2 blocks from the office. Really nice owner, 110 year old three story house. The mid-week was slow, so I decided to attempt one of those "Jerry Peck" style inspections I read about, and see how long it took, and how much more I found. I made 3 visits, spent 13 hours in the house - did find stuff I would have missed otherwise but it was all minor with the exception of a piece badly damaged BX with an exposed hot conductor *just* visible in one corner of the attic - I spent 3 hours completely crawling it at around 115F. So my conclusion was that my normal 3 1/2 to 4 1/2 hours for such a structure is pretty close to optimal cost/benefit for the client (though not perhaps for me).

Charles,

Although I just reciently moved to Las Cruces I am hearing from some of my neighbors who are selling homes that they had the inspections done. For the most part these folks are people of means and don't mind spending the extra bucks for this inspection. The Realitors are the ones who need to be sold on the idea as you probalby know. I find that they have a hard time having that conversation with the sellers for fear of loosing the listing. It a good idea but it is agent driven, that has ben my experience. Oh one other thing the neighbors are FSBO's. It was a word of mouth thing.

I believe the sellers inspection should be tailored to the sellers contract. Here in Florida we have the FAR & the FAR/BAR contract which stipulates what the seller is responsible for in regards to repairs. Mostly, the seller is responsible for the "Deal Killer" items like roof, structure, foundation, system & built-in appliances, and WDO damage.

Personally, I believe a sellers report should be a limited to the scope of the contract and not any SOP which would in most cases yield a small, concise report that might actually get read.

Joe I really don't know anything about Florida and its requiremenst but for the most part I know of these thing as disclousres on the part of the seller and there responsibility to do that. I once convinced a Realitor in NYC to make it a part of his listing services to offer a pre listing inspection to all of there sellers. They like the idea because I was able to get them to sit down long enough to explain how it would benefit there listing. You know how hard it is to get any of them to sit down long enough. We even offered a package deal to the seller for termit inspection and any small repairs they wanted to do to the home by a contractor associated with us. In a tight market it aided in getting the home to closing without any hitches during the buyers HI's. The key was getting the agents trained about this and convincing the seller to get the house in shape before problems arise during the HI before the sale. It happed only once for me and it turned out to be a lot of work on my part. I don't reallly know if it was worth it or not. The listing realitor marketed all of his listing using this information to get a leg up on the competion.

Originally Posted by Charles Smith

Anyone doing pre-listing (seller) inspections?
I have had a few recently.

Do you offer a re-duced fee wal-thru (review) to a prospective buyer?

In this "buyers market" it seems it would benefit by improving the transaction time... fewer inspection surprises or slow downs for seller... at least that is the idea.

Any marketing suggetions would be appreciated.

Yes, I do them. I do not market this service, but I did have a couple of agents contact me about doing them for their listings. I thought about it, and it looked and sounded like something that would work so I put a program together. Most of the homes are high end homes, say in the $700K and up range.

Charles, I do pre-inspections mostly at the request of the the sellers agents. Some agents around here market that service better than others so the buyer can get a birds eye view of their house and have the chance to make any repairs etc. from the inspection. The one thing I can say is that they are usually an easier inspection as the seller doesn't follow you around. I perform the pre-inspection just as I would for a buyers inspection. Once done I go over the report with the sellers the same way.

I also do seller inspections. I do them exactly the same as the buyers inspection and I make that clear to the client before the contract is signed.
I provide a sign which goes next to the realtors sign which states that the house has been inspected by a professional. I encourage the seller to address all problems found either by fixing them or being prepared to discuss and negotiate them. I do advertise and even do direct mailings to sellers who are still occupying the home. Closings tend to go much quicker for these sellers. One of the homes I inspected had so many problems that the seller refused to allow the sign and didn't tell anyone about the report. Their home is still for sale after 6 months.

I have done quite a few, usually not through realtors. I treat them just like a buyer's inspection. Most local realtors advise their sellers not to get pre-listing inspections for fear that they will have to disclose any defects I have found. "Ignorance is bliss" seems to be their motto. Any suggestions on how to argue against that reasoning?

I did one last week. The house was in very good shape. Most of the items were inexpensive punch list type items.

There is a local agent who is putting together a team. He has a finanical person, a stager, an appraiser, and a home inspector (me). The AGENT pays for all the services as part of his listing service. His idea is to eliminate all the potential pitfalls from the sale. He believes he will be able to sell houses in 30 days or less.

This is the first house he has brought all the forces to bear. This particular house had already been on the market for 6 months before he got the listing. I am interested to see how this process affects the sale.

The interesting part was the contract. The contract is made out to the seller. The agent writes the check.

In a conversation about a year ago, an agent for a local firm told me that they had tried PLI's recently and quickly got away from them. They assumed that they could use them to fix the big scary things before they were dumped on an already nervous buyer.
Seems that the PLI's were done and the items would be fixed, only to frequently have the buyer's inspector then come in and write up yet more things. This tended to freak some buyers out even more, wondering how many more things a third inspection might find!

As you can imagine, the key is getting the right guy in there first.

Originally Posted by Bruce Ramsey

I did one last week. The house was in very good shape. Most of the items were inexpensive punch list type items.

There is a local agent who is putting together a team. He has a finanical person, a stager, an appraiser, and a home inspector (me). The AGENT pays for all the services as part of his listing service. His idea is to eliminate all the potential pitfalls from the sale. He believes he will be able to sell houses in 30 days or less.

This is the first house he has brought all the forces to bear. This particular house had already been on the market for 6 months before he got the listing. I am interested to see how this process affects the sale.

The interesting part was the contract. The contract is made out to the seller. The agent writes the check.

Cash those check quickly! That agent won't be in business very long!!

I agree with Scott.

Working that close with an agent will put you into a suspected conflict of interest someday.

My attorney told me that we should never take a check from a realtor on any inspection. Let the seller or the buyer pay you.

rick

I had to take a check from a realtor about 6 years ago... I still wash my hands everytime I think of it.

Having the realtor pay for the inspection is something that the buyer worked out before-hand with the agent. They just didn't let me in on the agreement.

The buyer called me and scheduled the appointment... then, asked for the price. He didn't care!! If I'd known the agent was paying for it, I'd have maybe quoted different .

rr

Disclosure seems to be the biggest problem for the seller since they are now required to disclose all the problems we find in the inspection and report. Without the pre-listing inspection, they may not know the problems so are obviously not required to disclose them.

Chris Roust
Juneau, Alaska

You can't give them away here in PA. I do maybe 1 per month and it isn't worth my time to market them. Elevated liability for the seller is the primary reason most Reators give, and I don't blame them one bit. This is a litigious field we are in.

Originally Posted by Chris Roust

Disclosure seems to be the biggest problem for the seller since they are now required to disclose all the problems we find in the inspection and report. Without the pre-listing inspection, they may not know the problems so are obviously not required to disclose them.

Chris Roust
Juneau, Alaska

I agree with Chris ... when you do those inspections the same way as you do you inspections for buyers, assuming you do a thorough job for your buyers, and you should not do these inspections any differently, then it all becomes a disclosure nightmare for the sellers if they do not repair was was reported.

When this aspect is fully and properly explained to seller, very few have chosen to go ahead with pre-listing inspections - they would rather take their chances and hope to get a real estate agent friendly inspection when it sells.

Originally Posted by Joseph Michalski

....Elevated liability for the seller is the primary reason most Reators give, and I don't blame them one bit.

Pre-Listing inspections minimize and/or negates liability of the Seller in Disclosure. Agents suggesting otherwise to you do not understand the program and/or current PA Legislation.

Originally Posted by Joseph P. Hagarty

Pre-Listing inspections minimize and/or negates liability of the Seller in Disclosure. Agents suggesting otherwise to you do not understand the program and/or current PA Legislation.

I would not say that it negates the sellers liability. They still have to report what is wrong. If they lie, then their liability I would think is even greater. They lied about conditions that were found and documented during a home inspection. Everyone knows that a home inspection was done as many agents advertise the fact, and that makes it kind of hard to make that inspection disappear.

I would also think that the RE agents liability increases as their knowledge of the property has been increased. They might know more about the property than they really want to know after a home inspection.

Kind of a double edge sword.

Originally Posted by Scott Patterson

....I would also think that the RE agents liability increases as their knowledge of the property has been increased. They might know more about the property than they really want to know after a home inspection.

Kind of a double edge sword.

Scott, I agree. Of course, the RE agent would want to minimize their liability by providing a copy of the home inspection to all of the potential buyers. So much for limitation on distribution of the report!